LEXINGTON, Ky. (Jan. 27, 2015) — Lexmark International today reported slight increases in fourth quarter revenue over 4Q13 and for the full year of 2014 versus 2013 as growth in its software and managed print services business continue to offset expected declines in the inkjet printing business it is exiting.
“In the fourth quarter, Lexmark delivered revenue growth that exceeded October guidance,” said Paul Rooke, Lexmark chairman/CEO. “For the year, Lexmark’s Managed Print Services and Perceptive Software combined revenue exceeded $1.1 billion, grew 18 percent and increased to 30 percent of Lexmark’s total revenue.
“These results reflect Lexmark’s ongoing transformation to a higher value portfolio of imaging and software solutions that enable customers to manage their unstructured information challenges,” added Rooke.
“Approximately 70 percent of Lexmark’s revenue comes from our more predictable imaging and software annuity streams,” said Rooke. “2014 marks our 13th consecutive year of positive free cash flow, which fuels Lexmark’s disciplined capital allocation framework of building and growing our solutions business while concurrently rewarding shareholders through the ongoing return of capital.”
Lexmark reported 4Q revenue of $1.023 billion, which is a 1.6 percent increase over 4Q13. The company reported a loss of 42 cents per share for 4Q14, but when mark-to-market adjustments are made that becomes a $1.11 positive earnings per share. These adjustments primarily involve Lexmark’s pension and post-retirement plans. However, the company also reported a 18 cent decrease in earnings per share occurred due to higher than expected taxes as some earning were shifted from one country to another and 8 cents per share because of “currency headwinds.”
Among highlights in Lexmark’s earnings reports for the fourth quarter and full year results:
• Revenue growth exceeded October guidance range
• Revenue excluding Inkjet Exit grew 7 percent, seventh consecutive quarter of growth
• Combined MPS and Perceptive Software revenue exceeded $1.1 billion in 2014
• Non-GAAP EPS impacted $0.18 per share due to higher than expected taxes and additional currency headwinds
• Generated strong free cash flow of $153 million in quarter, $282 million in full year
• Share repurchases and dividends totaled $44 million in quarter, $165 million in full year
• Claron acquisition broadened company’s medical content management capabilities